Irvine, California – April 27, 2023 – CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the first quarter of 2023 of $4,618,000 or $1.37 per diluted share as compared to $4,058,000 or $1.15 per diluted share for the first quarter of 2022, an EPS increase of 19%.
Key Financial Results for the three months ended March 31, 2023:
- EPS of $1.37 up 19%
- Net income growth of 14%
- ROTE of 27.19% up 16%
- ROA of 1.71% up 35%
- Net interest income of $9.9 million, up 15%
- Net interest margin of 3.91%, up 37%
- Efficiency ratio of 42.81%
- ALLL to total loans ratio (net of PPP loans) of 1.44%
- Liquid funds to total deposits ratio of 15%
- No outstanding FRB or FHLB borrowings
- Non-interest bearing deposits to total deposits of 58%
- Bank tier 1 leverage ratio of 11.36% and total risk based capital ratio of 18.51%
- 53 quarters of consecutive profits
Mr. Ivo A. Tjan, Chairman and CEO commented, “The Company has reported strong results for the first quarter, with a ROA up 35%, a ROTE up 16%, EPS growth of 19%, and net income growth of 14%.” Mr. Tjan added, “We maintained a strong level of liquidity with a low leveraged balance sheet and 58% of our deposits were non-interest bearing. The Bank continues with our fortress balance sheet approach that includes strong capital ratios, a strong liquidity position, a well-diversified deposit base and prudent underwriting standards. We sincerely appreciated the continued loyalty and trust from our clients and look forward to welcoming new client relationships and expanding current relationships in 2023.”
Total asset decreased $150.7 million as of March 31, 2023, a decrease of 12% as compared to the same period one year ago. The Bank’s 2022 business objectives included deleveraging the Bank in order to strengthen capital ratios in anticipation of a recession. Total loans decreased $28.3 million as of March 31, 2023, a decrease of 4% from the prior year. Excluding PPP loans, total loans decreased $6.6 million as of March 31, 2023, a decrease of 1% as compared to the same period one year ago. The Bank remains prudent and conservative about credit quality. Cash and due from banks decreased $99.6 million or 34% from the prior year. Total investment securities decreased $25.9 million, a decrease of 14% from prior year. Total deposits decreased $154.3 million as of March 31, 2023, a decrease of 13% from March 31, 2022. Non-interest-bearing deposits decreased $111.0 million as of March 31, 2023, a decrease of 16% over the prior year. Interest bearing deposits decreased $43.3 million as of March 31, 2023, a decrease of 9% from the prior period.
Interest income was $12,004,000 for the three months ended March 31, 2023, as compared to $9,172,000 for the three months ended March 31, 2022, an increase of 31%. Interest expense was $2,145,000 for the three months ended March 31, 2023, as compared to $636,000 for the three months ended March 31, 2022, an increase of 237%. Interest expense was up for the quarter due to the rising cost of deposits.
Net interest income for the three months ended March 31, 2023, was $9,859,000 compared to $8,536,000 for the three months ended March 31, 2022, an increase of 15%. The net interest margin increased for the three months ended March 31, 2023. It increased from 2.85% in 2022 to 3.91% in 2023, an increase of 37%.
Provision for loan losses for the three months ended March 31, 2023, was $75,000 compared to $125,000 for the three months ended March 31, 2022, a decrease of 40%.
Non-interest income for the three months ended March 31, 2023, was $1,253,000 compared to $1,394,000 for the same period last year, a decrease of 10%.
Non-interest expense for the three months ended March 31, 2023, was $4,867,000 compared to $4,186,000 for the same period last year, an increase of 16%.
The efficiency ratio for the three months ended March 31, 2023, was 42.81% compared to 41.73% in 2022, which represents an increase of 3%. The efficiency ratio illustrates that for every dollar made for the three-month period ending March 31, 2023, it costs $0.4281 to make it, as compared to $0.4173 one year ago.
Capital ratio for the Bank remain above the level required for a “well capitalized” institution as designated by regulatory agencies. As of March 31, 2023, the tier 1 leverage ratio was 11.36%, the common equity tier 1 capital ratio was 17.26%, the tier 1 risk-based capital ratio was 17.26% and the total risk-based capital ratio was 18.51%.
CommerceWest Bank is determined to redefine banking for small and medium sized businesses by delivering on customized products and services. Founded in 2001 and headquartered in Irvine, California, the Bank serves businesses throughout the state of California with our digital banking platform. By employing a strategically selected team of experienced professionals, we will provide flexibility, create a complete, safe and sound banking experience for each client. We provide a wide range of commercial banking services, including remote deposit solution, NetBanker online banking, mobile banking, lines of credit, M&A / working capital loans, commercial real estate loans, SBA loans and treasury management services.
Mission Statement: CommerceWest Bank will create a complete banking experience for each client, catering to businesses and their specific banking needs, while accommodating our clients and providing them high-quality, low stress and personally tailored banking and financial services.
Please visit www.cwbk.com to learn more about the bank. “BANK ON THE DIFFERENCE”